THE RENTAL MARKET HAS COOLED, BUT FUTURE LOOKS BRIGHT
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The rental housing market has changed fairly dramatically in the past few short months. We have seen a decline in the demand for rentals, and properties stay on the market longer than they did in the summer. Even though market rents are lower these days than they were in August or September, they are still higher than they were this time last year. There is no doubt that a correction is underway, but the long-term outlook remains optimistic.
There are two main reasons for the current situation—the season and the economy as a whole. Traditionally, while the period between the end of May and the end of September is the busiest time of the year in the rental housing market, fewer people move between the Holidays and in the winter season generally. This time of the year is typically slower in terms of leasing, and this year is no exception.
There is an overarching trend of demand decline that we see on all the levels—local, state, and national. Generally, it is caused by the rising interest rates—with mortgages getting more expensive, more people are having trouble selling their properties, and so they are turning them into rentals, which raises the supply of units to rent. On the other hand, the demand for rental housing hasn’t caught up (yet)—with the economic uncertainty in the air, people haven’t been moving as much, and are staying in their current residences and/or getting roommates. Overall, the trend creates a downward pressure on rent amounts, and properties stay vacant for a longer time.
That being said, houses, apartments, and condos still get rented, and in comparison to the past years, rents have been on the rise. While we see some correction in the market, it is certainly not a catastrophe, and it is a good time to own a rental property (or a few).
If you need help with managing your single-family or small-multifamily rental property, feel free to give us a call at 503-436-3300 to determine if we are a good fit for each other. Our pricing is transparent and can be found on our website: longstreetpropertymanagement.com. Our office is located at 552 SW 3rd Street in Corvallis.
This article appeared in the Real Estate Guide, January 2023.